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T-Mobile to pay termination fees, reports customer growth

T-Mobile on Wednesday reported a fourth-quarter boost in customer growth and offered to pay customers to switch from rival services, further escalating already intense competition in the U.S. wireless market.

The No. 4 U.S. mobile operator promised payments of up to $350 to consumers who break their contract with any of its bigger rivals and switch to T-Mobile.

The offer came just days after AT&T promised a $200 credit to T-Mobile customers who switch. While AT&T also offered up to $250 for switching customers who trade in their phone, T-Mobile said it would pay up to $300 for trade-ins.

(Watch: AT&T targets T-Mobile)

Both companies are targeting each other directly because they use the same network technology, making it easy for consumers to bring their phone when they switch, raising fears of an industry wide price war.

T-Mobile, which is 67 percent owned by Deutsche Telekom, said it added 1.645 million net customers in the fourth quarter, up from 1.023 million in the third quarter including 869,000 valuable postpaid customers, up 13 percent from the third quarter.

It said that customer defections, known in the industry as churn, stayed at its third-quarter levels of 1.7 percent and compared with 2.5 percent in the fourth quarter of 2012.

—By Reuters

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